N134bn Ogoni Judgment Debt: Shell Loses Appeal At Supreme Court

The Supreme Court has dismissed the appeal filed by Shell Petroleum Development Company (SPDC), which prevented First Bank of Nigeria Limited from paying the plaintiffs community a judgment debt now totaling N134 billion to the plaintiff community represented by 10 Ogoni Chief of Ejama Ebubu community of Ogoni in Rivers State.

In a ruling on Friday, Justice Kumai Bayang Akaahs said the notice of appeal filed by the oil giant was incompetent and struck out based on Order 8 Rule 7 of the court’s rules.

Justice Akaahs also said motion filed by Shell on July 16, 2018 had no leg to stand on it ought not to have been filed.

The Supreme Court consequently awarded N500,000 against Shell for filing an incompetent appeal in the court.

Citing authorities to back up his submission, the apex court held that since the notice of appeal filed by Shell sought to be amended was incompetent, no valid amendment could be effected because issues of fact or mix law and fact were raised in the original notice of appeal with leave of court.

He agreed with the submission of the lead counsel to Shell, Chief Wole Olanipekun (SAN) that an appellant who has a valid and subsisting appeal can seek the leave of court to do so, adding that in the instant case, there is no such valid notice of appeal that could be amended.

“Where the grounds of appeal are based on mixed law and facts and the leave of either the Court of Appeal or the Supreme Court is not sought and granted, the appeal is incompetent and neither the Court of Appeal nor the Supreme Court will have any jurisdiction to entertain the appeal.

“As the notice of appeal sought to be amended was incompetent, no valid amendment could be effected even though issues of jurisdiction were raised in the proposed notice of appeal.

“Learned senior counsel for the appellants stated that correct legal position that the appellant who has a valid and subsisting appeal can seek the leave of court to do so but in the instant case, there is no such valid notice of appeal that can be amended, Justice Akaahs held.

The suit was first commenced in 1991 before a Rivers State High Court sitting at Nchia Division, when the Ejama community represented by Isaac Osaro Ogbara, Victor Obari, John Oguru, Joseph Ogusu, G. O. Nnah, George Osaro, and Adanta Obelle, had sued Royal Dutch Shell Plc, Netherlands, Royal Dutch Shell Plc, United Kingdom, and SPDC over alleged oil spills in 1970 that occurred when Shell operated in the community. Judgment was entered for the sum of N6Billion in favour of the community by the Nchia High court. That judgment was conceded on appeal because the Supreme Court had in a sister case decided that States High Court have no jurisdiction in oil related matters. The Plaintiffs in 2001 refiled the suit at the federal High Court, Port Harcourt.

However, this 2001 case, presided over by Justice Ibrahim Buba claiming N17billion and interest thereon went through full trial. Justice Buba, after listening to the submissions of the parties in the suit, in his judgment in 2010, awarded N17 billion to the representatives of the Ogoni people.

The court equally granted the Ogoni chiefs 25 per cent interest charge on the principal sum of about N17 billion.

SPDC then appealed against the judgment and applied for a stay of execution of the judgment pending the appeal.

As a condition for granting the stay of execution, the court required Shell’s bankers, FirstBank, to provide a guarantee of the judgment sum plus interest.

This condition was complied with. But Shell’s appeal failed on merit because Shell failed to file a brief of argument in support of their appeal but instead claimed that they were granted leave to file an amended brief of argument, which the Court of Appeal found not to be correct.

Against that judgment, Shell proceeded to the Supreme Court where its lawyer, Olanipekun, SAN now leading Olawale Akanni (SAN) who was the company’s lawyer at the Court of Appeal when that appeal was dismissed, filed a fresh application asking for leave to amend the original notice of the appeal filed by Akoni in the Port Harcourt court of appeal registry in order for him to argue fresh points not raised at the court below and in order for him to argue 36 additional grounds of appeal.

Upon the new application at the apex court, the respondents’ lawyer, led by Lucius Nwosu, SAN, filed a preliminary objection. It must be noted that the appellants against whom judgment was entered at the court of appeal are Shell companies – Shell International DV of the Netherlands, Shell International of UK, and Shell Development Company of Nigeria Ltd.

Nwosu, assisted by Lawal Rabana, SAN and others, argued that the findings of the Court of Appeal dismissing their appeal were based on facts, adding that the law is that an appeal must arise out of the decision complained against.

He stated that if the decision complained against was based on findings of fact, the constitution requires that you cannot appeal them except you first seek leave of the Court of Appeal.

The respondents’ lawyer contended that since that notice of appeal at the Court of Appeal was filed without leave, it meant that, that notice was incompetent and cannot be amended because it would mean putting something on nothing and expecting it to stand.

However, in December 2017, the judgment creditors (Ogoni chiefs) commenced garnishee proceedings at the Federal High Court in Owerri presided over by Justice Lewis Allagoa.

They urged the CBN to pay them N122.53 billion out of FirstBank’s account in its custody.

THISDAY gathered that they calculated the principal sum of N17 billion and the accrued 25 per cent interest charge per annum to arrive at the sum of N122,533,403,392.

In January 2018, Justice Allagoa granted them a temporary order (garnishee nisi) ordering the CBN to pay them the sum from FirstBank’s account with it.

But the CBN asked the court not to make absolute the temporary garnishee order it granted six chiefs representing the Ogoni community, compelling it to pay the sum of N122.53 billion on behalf of FirstBank.

CBN’s lead counsel, Professor Fabian Ajogwu (SAN) while responding to the garnishee proceeding, stated that making the order absolute and compelling the CBN to pay out the huge sum would be against the interest of justice because the matter was still pending at the Supreme Court.

He also argued that compelling the CBN to pay the N122.53 billion from FirstBank’s funds domiciled with it could have far-reaching consequences for Nigeria’s oldest and biggest lender by assets and deposits, and a systemic impact on the rest of the financial system and wider economy.

With the dismissal of the Shell’s appeal last Friday, it is not clear if the application filed by the Ogoni chiefs seeking garnishee absolute against FirstBank and reserved for ruling by Justice Ibrahim Buba of the Federal High Court in Lagos would not be granted.

Reacting to the Supreme Court judgment yesterday, Nwosu said: “With this decision, therefore, all arguments of FirstBank that Shell was on a further appeal at the Supreme Court for which they were renging from honouring their obligation that was due by virtue of their guarantee has completely collapsed and as of today, the guarantee is standing at N134 billion, contingent liability of First Bank’s assets. And that there is a garnishee order nisi attaching First Bank’s money at the CBN which since had been served on the Central Bank.

“With this judgment now, the central bank is under an obligation to set aside that amount of money with interest still running from First Bank’s account to satisfy that judgment debt based on what the law says under garnishee orders.”